NGOs slam drafting process for Ministerial services text

A group of over sixty civil society organizations and trade unions in an open letter Tuesday to Pascal Lamy, in his capacity as WTO Director-General and Chair of the Trade Negotiations Committee, has slammed "the highly undemocratic and deceptive process used to manufacture" the services section of the draft Ministerial Declaration for Hong Kong.

In an open letter titled "Redefining what 'consensus' means in the WTO?", the groups urged Lamy to ensure that - as in previous years - a draft Ministerial Text will be presented to Ministers of WTO Members that includes within brackets the positions of all Members on matters where consensus does not exist.

Among the organizations that signed the letter are ActionAid International; Africa Faith and Justice Network (US); ATTAC (France, Japan and Norway); Berne Declaration (Switzerland); Centre for International Environment Law (US); Christian Aid (UK); Congress of South African Trade Unions (South Africa); Focus on the Global South; Friends of the Earth (US); Institute for Agriculture and Trade Policy (US); International Gender and Trade Network; Public Services International; Southern and Eastern African Trade and Information Negotiations Institute (SEATINI); Third World Network; World Economy, Ecology & Development (Germany); and World Development Movement.

The letter is in reference to a 'Note by the Chairman' on 'Possible Elements for a Draft Ministerial Text on Services' that was first released on 13 October by the Chair of the services negotiations Ambassador Fernando de Mateo of Mexico.

The draft text listed several controversial elements - without brackets - that included 'sectoral and modal objectives', 'plurilateral' and 'multilateral' approaches, and 'numerical targets and indicators'. These elements were opposed by a majority of developing countries.

Despite the opposition, these elements were reiterated and elaborated upon by the Chair in his second draft, and further fleshed out in the 26 October draft services text for the Hong Kong Ministerial. A revised version of the draft is expected to be released by the Chair by 3 November.

The groups said that the process completely redefines the "consensus" mode of decision-making: rather than having a consensus before an item is included in a negotiating text, it now appears that, at least in the case of the Council for Trade in Services, the Chair can include items from demandeurs that he deems appropriate, even if there is no agreement amongst the membership, and these can only be removed if there is complete consensus amongst 148 Member states.

This process also sidelines the positions that the majority of developing countries have articulated, and their opposition to the introduction of "complementary approaches". These approaches would eliminate the current flexibilities that developing countries have enshrined in the General Agreement on Trade in Services (GATS) negotiations. The flexibilities are an acknowledgement that in order to meet national development objectives, countries require time and must selectively and strategically regulate their liberalization process.

According to Chandrakant Patel of SEATINI, one of the letter's sixty-eight signatories, "we have noted with concern the new and undemocratic practice of the Chairmen of various negotiating Groups preparing drafts purporting to reflect negotiated consensus: in arrogating this right, the Chairmen have undermined the long established practice, wherein the negotiating groups as a whole exercise the right to adopt texts by consensus.

"We urge all developing-country and other like-minded WTO members to reject the new practice of the various Chairmen (including the TNC and of the General Council) drafting and transmitting texts in their own capacities".

The open letter refers to the elements listed by the Chair in his 13 October 'Note by the Chairman', saying that these elements do not have the support of the whole membership.

In particular, benchmarks, modal specific approaches or numerical targets to speed up the GATS negotiations have been intensely rejected by a large number of developing countries including the LDCs. The many statements made by countries and coalitions in the various Council for Trade in Service (CTS) meetings prove this, the letter said.

In the CTS, many delegations therefore requested that these issues be removed or bracketed, given the lack of consensus. They also pointed out the double standard: that the section on 'Rules', referring to the emergency safeguard mechanism (ESM) negotiations, was placed in brackets even though it was agreed to be negotiated. It was also repeatedly stated that a new paragraph on Principles should reinforce the current architecture of the GATS.

Despite these objections, the letter added, the new proposals regarding new approaches again reappeared - un-bracketed - in Ambassador Mateo's second draft elements dated 20 October (JOB(05)/234/Rev.1), and have been further elaborated upon in the draft Ministerial Text on Services released on 26 October (JOB(05)/262). A second draft of the text will be released by 3 November - the text the Chair aims to bring to Hong Kong.

"Whilst the Chair is putting into the text elements that clearly do not have consensus, elements to be taken out, according to him, require the complete consensus of members!"

At the same time, what has already been agreed upon for negotiations, the ESM, a promise made since the Uruguay Round as reflected in Article X.1 of the GATS, but where the developed countries have been dragging their feet - was not elaborated upon by the Chair in the draft Ministerial text. The draft Ministerial text also failed to reinforce the current architecture of the GATS.

The open letter highlighted two issues that the groups found to be particularly worrying.

First, having multilateral approaches such as numerical targets and indicators - essentially compelling countries to open up a specified number of sectors - will contravene the built-in flexibilities of the GATS and put developing countries' development objectives and policy space in jeopardy. Even plurilateral approaches are problematic since these negotiations will be driven by those with the biggest export capacity.

Those who are party to the negotiations will determine critical issues such as "classification issues" within the sector, as well as be the players drawing together the regulatory standards for what is acceptable within such plurilateral agreements. These standards will be those in harmony with the interests of the major corporations.

Based on past experience with the financial services and telecoms agreements, there is no guarantee that Members will not be intensely pressured to join in these plurilateral agreements. Those who may want to join in later, will find the rules of the sector already pre-determined, in line with certain corporate interests.

The second issue of concern is that of process. "As we questioned the process in the run-up to the Cancun WTO Ministerial Conference whereby the Chair of the General Council drafted the Ministerial Text on his 'own responsibility' without the consensus of the Membership, we again question the similar process that is occurring today," the letter said.

"This process clearly lacks inclusiveness and transparency. We must ask you, Mr. Lamy, if Ambassador Mateo's approach represents a new way of defining and practising consensus in the WTO? Can the Chair table draft elements that do not represent consensus and then require consensus for any amendments to the text?

"As Chair of the Trade Negotiations Committee, you have indicated that you might be tabling a draft Ministerial Text by mid-November based on the draft texts received from the Chairs of the various negotiating committees. Will you present a consolidated draft Ministerial Text based on submissions from negotiating committees that have been questionably crafted, as we have seen, for example, in the case of the Chair of the Council for Trade in Services?"

The groups said that they looked forward to Lamy's clarification on this matter and to ensure that - as in previous years - a draft Ministerial Text will be presented to Ministers of WTO Members, which includes within brackets the positions of all Members on matters where consensus does not exist.

"Civil society organizations in WTO Member states will hold you accountable on your responsibility to ensure that the draft Ministerial Text delivered to Ministers before Hong Kong reflects the consensus interests and positions of WTO Members and, in particular, in this Doha Development Round, of developing countries. Failure to do so only makes a mockery of the 'multilateral', 'rules-based' trading system," the letter concluded.